Despite risks, farmers persist

Considering how much risk U.S. farmers are willing to accept in running their businesses, their efforts are indeed worthy of praise.

Perhaps the greatest source of uncertainty in a farmer’s operation is the weather. Adequate rain must fall throughout the spring and summer, but too much rain in the spring and fall is not good. Soil temperatures must warm up before planting can begin, and an early frost is always a threat at the end of the growing season. Detrimental weather events eat away at yields and therefore profit margins.

Weeds and pests — both insects and plant diseases — stand ready to attack crops, thereby reducing yields dramatically if left uncontrolled. The western corn root worm, for example, tunnels into roots and causes defects in plant growth. Its larvae alone suck $3 billion out of farmers’ wallets per year on average.

Costs of production, including seed, fertilizer, pesticides, diesel fuel, taxes, borrowing costs, insurance and rents can rise independently of the price of crops. For example, cash rents for cropland in some of the most productive districts of western Iowa have risen as much as 21 percent this year. This is despite the fact corn, wheat and bean prices are lower on the year.

Despite all of these challenges, grain yields have dramatically increased since the 1930s.

For example, in 1935, the average corn yield was only 35 bushels per acre. By 2009, the best year on record so far, yields had risen to 165 bushel/acre — an increase of more than 400 percent.

As most Americans relax this weekend with a cornucopia of food in the refrigerator, they should give thanks to the farmers who make our abundance available.

U.S. FOOD PRICES LOW?

With frozen turkey prices up more than 50 percent compared to a decade ago, it might be tempting to draw the conclusion that food prices in the United States have gotten out of control. However, data on food prices worldwide indicate Americans spend less of their income than anyone else in the world.

According to the U.S. Department of Agriculture, the average American spends between 6 and 7 percent of their income on food. In comparison, Germans spend 11 percent, Chinese 35 percent and Indonesians nearly 50 percent.